THIS year has been a tumultuous year of change for politics: major shocks to the status quo were delivered by Brexit and Trump – caused not by brilliant politics or a much-feared lurch to the far-left or far-right – but actually just by a growing dissatisfaction and distrust of establishment figures and our political elites.

These political upheavals at the time of the vote registered 10 on the press version of the Richter scale, making people think that the fallout would be instant. I even heard a leading economist say Brexit has been a bit of a damp squib, but what people should bear in mind is that Brexit hasn’t happened yet (we haven’t even begun to negotiate) and Trump hasn’t become president.

The impact of these political tsunamis will not be felt until a few months after Trump takes office on January 20 and Brexit negotiations start to go wrong for the UK... sorry, I mean the UK starts Brexit negotiations at the end of March. Even then the changes will be slow to manifest and there may even be some good economic news in 2017.

Regular readers will know I detest Trump and all he stands for but in the short-term his economic policies may provide a boost to America’s economy. It’s not that his policies are that great, or even so different from those proposed by sections of the establishment that his campaign raged against, its just that he will have a working presidency.

Obama was always blocked by a Republican Senate, indeed he only had two years where he could get any of his policies through with ease and so his Affordable Care Act was his only major win.

Trump not only has Republicans in charge of both houses, he has filled key cabinet positions with establishment Republicans who campaigned against him. This means he will get his policies through again and again as the negotiation will be done with the establishment figures in his cabinet, not on the floor of the Senate or Congress.

So America should see a significant boost in infrastructure investment in 2017, creating jobs and boosting GDP through building bridges, roads schools and communications infrastructure (and possibly a wall, but I doubt it). Trump’s short-term effect may even see growth increase past four per cent and employment figures boasts will cement his power.

In the long run however, this will mean higher government debt, asset bubbles, and his trade protectionism stance will lead to inflation. Boom will turn to bust towards the end of his first term or, if he is lucky, at the start of his second.

Essentially what I am saying is that when you have a protectionist, climate change-denying, American supremacist with a zero understanding of international diplomacy, and who wants to invest in infrastructure to create jobs, it isn’t the infrastructure bit you need to worry about!

So America may experience a short-term boost whist China will keep slowing down.

Not so much of a problem as people predicted, as China’s rapid growth over the last two decades has been less about asset bubbles and boom and bust cycles and more about the waking of a sleeping giant, resting in massive infrastructure investment that will act as a foundation for future economic success.

In 2015, when others predicted a Chinese crash, I wrote in this column that China’s growth would just slow down over time to a more natural but healthy growth rate. China has a chaotic stock market with lots of private investors who are more likely to panic and currency valuation issues and so Trump’s protectionism agenda may impact poorly on China in the next few years. However, the fact that China owns so much of America (and its debt) makes me wonder if the USA will simply pivot its trading priorities towards China and away from post-Brexit UK and EU.

The EU will probably do better without the UK, which was a disrupting force, and its departure will give impetus to the reformers who will seek to improve systems and use the shared dislike of London to unite the rest of the EU.

As long as a deal is done to avoid tariffs on products with the UK – and the EU looks to punish the UK in other areas such as financial passporting – then the EU’s future looks strong and Trump’s lack of international presence may create an opportunity for the EU to become more of a force in global politics.

Brexit will start to cause problems for the UK later in 2017 as inward investment and exports fall, creating an unsustainable balance of payments deficit. A weakening pound could create significant inflation levels whilst wage growth slows, so people in the UK will start to feel worse off. Brexit won’t cause a sudden crash like in 2007-08.

It will be a slow steady decline, sharpening steeply at the point of Brexit in 2018, depending on how hard a Brexit is negotiated. However, it will seem like a sudden crash to the tens of thousands that will lose their jobs if we lose access to the single market.

What may be more perceptible to the UK public is a probable fall in property values in 2017. I have been predicting this for a while and I think a 40 per cent drop in London, 25-30 per cent throughout England and 10 per cent in Scotland is possible partly as a result of Brexit.

Personal debt is also reaching an unsustainable level in the UK, and if the pre-Christmas increase is anywhere near 20 per cent then a consumer spending slowdown will deteriorate economic growth and depress wages.

If that happens then inflation caused by a fall in the value of the pound and/or the need to increase interest rates (causing people to pay down credit cards rather than spend) could lead to a UK-wide recession at the point of Brexit. Any growth the UK does see will be accompanied by negative underpinning factors such as asset bubble creation, increasing wealth inequality and social spending cuts against a background of increasing need – in other words if the economy grows in 2017 then 2018 looks perilous.

Against this background, 2017 will see Westminster fail to take Scotland’s EU remain vote into consideration, and as Brexit draws nearer people will become far more open to a well-thought out plan for Scotland to prosper with through the powers of independence. So my final prediction is that indyref2 will be called in the last quarter of 2017, very probably for May 2018.